Many millennials are becoming home buyers due to steady job growth, low mortgage rates, and record apartment rents. What's lacking are houses for them to buy.

Prashant Gopal writes as the U.S. spring sales season approaches, strong real estate demand is being overpowered by the lack of lower-priced supply. This creates an affordability issue for younger people, because they are being challenged by purchasers at the higher end of the market. Fannie Mae Chief Economist Doug Duncan believes prices will rise while limited inventory will put a cap on transactions.

“Affordability is a challenge this spring,” Duncan said. Prospective buyers “would have gotten their credit in shape and they’ll have a job. But they will be frustrated because, in their market, there simply won’t be affordable homes.”

“As soon as a house hits the market, it will be eaten by the huge demand appetite,” said Nela Richardson, Redfin’s chief economist.

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